Housing News

Cash for What?

Everything’s going to be exchanged sooner or later.

It all started with cars. Now there are toys and appliances. Soon, we’ll be less surprised on what the government will induce people to spend on. So who’s game?

The Car Allowance Rebate System (Cash for Clunkers) program was intended to boost sales for car manufacturers. By offering cash to owners of eligible vehicles, owners would trade these for new automobiles. Well, to everyone’s surprise, it wasn’t a U.S. manufacturer that earned the most from the program. Toyota edged out Ford, GM, and Honda by thousands.

With the success of the program, many are thinking of raising their revenues by doing the same thing. Toys ‘R’ Us recently announced it will cut 20 percent off the price of new products for every similar old item that is traded in. The company denies they’re following the government’s program – saying that they’ve already planned offering discounts in exchange for old items two years ago.

Another plan in the works is the federal program for home appliances. BusinessWeek reports, “… Beginning late this fall, the federal program will authorize rebates of roughly $50 to $200 for purchases of high-efficiency appliances that bear the Energy Star seal. The money is part of the broader economic stimulus bill passed earlier this year. Program details—such as which appliances are covered, the exact size of the rebates, and how they get processed—will vary according to each state’s proposals, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications to participate. Washington expects to award the bulk of the money by the end of November.”

So, if this is the case, why are construction and homebuilding firms not given support? Read this report by CNNMoney.com if you want to find out the extent of the crisis’ effects.

We wish the government had a better idea of how to carry out this suggested program – more than what we can imagine (shingles for $0.50 cents per piece could work, we suppose). If they can hear the manufacturers in Detroit, why not the thousands of homebuilders going out of business?

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